U.S. Abandons Plan to Deduct Veterans' Debts from Payments to Colleges

December 23, 2011

The U.S. Department of Veterans Affairs on Thursday hastily withdrew a policy change that would have allowed the agency to deduct from its tuition payments to colleges any debts that student veterans owed the government from their Post-9/11 GI Bill benefits. The approach, which college officials had learned about this week via e-mail from a regional office of the veterans' agency, caused immediate consternation among campus veterans' education administrators and others, who feared they would then be put in the awkward position of becoming the government's debt collectors from their own students. "[T]he school will get shorted money and be expected to recoup it from the Veterans," one administrator wrote on a listserv for veterans' officials. "This is going to make the schools VERY mad."

A spokesman for the veterans' agency said in a statement late Thursday: “System changes installed this week allowed for collection of Post-9/11 Bill debts from all education benefit payments issued to or on behalf of the student. However, because these changes had not been fully vetted, they have been withdrawn effective today.”